Twitter Layoffs, Paid Ticks: Will Elon Musk Get A Taste of His Own Medicine?

Like newspapers lost out to TV serials, lifestyle magazines in ad money, Twitter is miles behind in milking dollars.

Knowledge, work-centered companies need sensitive handling, and Musk may not be up to the task. But it is equally true that he is tweaking the software and instilling financial discipline into the company that was resting on its early laurels for too long.

(Photo: iStock)

Repeat after me: There is no such thing as a free lunch.

It may be fashionable to flay, criticise and lampoon Elon Musk after his bull-in-a-china-shop act on taking over Twitter Inc, and the last word on whether his public coup is successful or not may be months away. But it all depends on who you are talking to, what success is, and what yardstick you use. One thing is is clear: You are accountable to shareholders in corporate life.

And there is a basic message as real to loss-making companies as to deficit-struck governments: You gotta do what you gotta do and cut your bills, whether you are an American entrepreneur like Elon Musk or a British prime minister, like Rishi Sunak.

Musk’s Sacking Spree and a ‘Paid Twitter’ Act

We shall wait to see what Sunak does in London to lower state expenses in his embattled economy, but it would be a lot more difficult for him than it has been for Musk, who axed about 3700 employees or half of Twitter's workforce in a heartless and art-less act that was impersonal, brutal, quick and public.

You can certainly complain about the crass style or the fact that Musk may have overused his headcount guillotine but given his talk of Twitter losing USD 4 million a day and his move to charge USD 8 a month to get users verified with a trademark Blue Tick, the writing on the wall was that somebody had to pay for the lunch, be it of the user or of the employee.

Twitter co-founder Jack Dorsey has publicly apologised to no one in particular for his furious hiring in anticipation of growth in the microblogging site. Nice guy and all that, yes, but this apology is as much a confession about the identity crisis in a company that in a short span of a little over a decade became the planet's premier platform for political conversations.

Musk and Dorsey’s Catfight Over ‘Birdwatch’ Aka Twitter

For Tesla-founder Musk, this is a USD 44-billion project of pride in a new role. First, he wants to turn around the company and make it profitable. Secondly, he wants to be a hero for America's right-wing(RW) upset over content moderation on Twitter. The free-speech absolutism that Musk wants to uphold often translates into a licence for the RW to shout, abuse or twist conversations.

The US has free-speech laws that put leniency over decency but what matters more perhaps, is that Musk has managed to pull in investor/creditor money to put where all those free-speech mouths are. He has to make their money worth it.

We are back to that old lesson: no free lunch etc.

Dorsey and Musk have been having (on Twitter, where else) a debate-meets-dogfight on how to measure accurate information on the site. Such intellectual banter must translate at some point into money for a listed company to last.

There is a US-based professor writing an Op-ed in an Indian newspaper suggesting that Twitterati upset with Musk's helter-skelter act should take a sabbatical from the site before deciding whether they should stay based on "good governance, decency and fairness." This would potentially make the unlikely sabbatical — a 21st century act of an industrial strike that can bring corporate management to its knees.

There is also a slew of advertisers reported to be pulling out commercial money from Twitter. Can users and advertisers act to throw a spanner in Mr. Musk's works? Can liberal/woke money compete with nuts-and-bolts Wall Street makeovers? The jury is out on that but methinks idealism does not come cheap or easy.

You can craft Newton's Law-like line to check where this may go: 'If the money lost by users and advertisers deserting Twitter is more important to the company's bottomline than the amounts saved by layoffs and gained by paid-for verification, the Libbies win.'

How Privately-Owned Twitter Guides Public Life

Here's where we need to truly understand the nature of the beast: Twitter is a listed private sector company patronised by a listless bunch of busybodies interested in shaping public life. How do you deal with a Wall Street monster that has the character of a public good?

Years ago, I had suggested in a column that NGOs and public institutions including the United Nations should subscribe to Twitter's initial public offer (IPO) of shares to maintain its public character.

In effect, Twitter is like a highway for political conversations, and could have been treated as an infrastructure facility supported by public money or social charity. This would have made the company less of a market diva that has to dance every quarter to prove itself to shareholders that is in good shape.

Musk came in precisely because Dorsey and his ilk used private money as if it was public money. Users overconfident about paying with their attention to help Twitter get advertising money are a lot like old-fashioned newspaper readers expecting that their eyeballs are good enough to fund salaries and promotion.

Just as newspapers lost out to TV serials and lifestyle magazines in the ad money stakes, Twitter is miles behind Facebook or Google in milking ad dollars.

Can Musk’s Masterstrokes Check Boxes?

Let's face it, Musk has spotted an opportunity in something that for early Twitter was a basic necessity. In order to ward off fake profiles and wannabes, Twitter had created the 'Verified' or 'Blue Tick' status that created an elite class that puts off the wannabes and democracy absolutists.

Now Musk wants to make it all like an airline: if you are ready to pay USD 8 a month, you can fly business class — and it is all transparent, unlike the legacy problem of verification that was a bit ad-hoc, opaque and arbitrary (like government awards).

New reports suggest some laid-off employees are being called back on the ground that there was some mistake in their axing. This is where Musk could go seriously wrong.

Wielding the scalpel for surgical precision is one thing, but chopping off a hand where a few fingernails were to be trimmed is quite another.

Knowledge, work-centered companies need sensitive handling, and Musk may not be up to the task. But it is equally true that he is tweaking the software and instilling financial discipline into the company that was resting on its early laurels for too long.

In a battle between user smugness and takeover hubris, we should not jump to conclusions too fast but, it is certain that Internet users interested in robust public life should always keep an eye on who pays for their games on digital playgrounds.

(The writer is a senior journalist and commentator who has worked for Reuters, Economic Times, Business Standard, and Hindustan Times. He can be reached on Twitter @madversity.)